- What is the cost of trading Bitcoin?
- Things to Consider While Purchasing Cryptocurrency
The trading of cryptocurrency has gained huge popularity since its debut in 2009. There are dozens of online exchanges that are operational, providing investors with platforms where they can buy and sell or trade cryptocurrencies.
What is the cost of trading Bitcoin?
Apart from the price of the cryptocurrency, a user is required to pay a fee to crypto exchanges, when buying or selling crypto tokens. In some instances, traders levy both trader and maker fees, in cases where the limit order is already present in the order book.
Apart from the price of crypto, the cost of trading at exchanges includes, trading commissions paid to exchanges, fund transfer fee to the bank, and lastly width of the bid-ask spread. The fee on crypto exchanges is calculated in two ways: as a flat fee on every trade or as a percentage of 30-day trading volume for an account.
Things to Consider While Purchasing Cryptocurrency
While purchasing cryptocurrency a trader must be aware of the following things.
- In most jurisdictions, cryptocurrency exchanges are unregulated. In many countries, having the biggest trading markets, a hands-off approach for the regulation of cryptocurrency has been implemented. In the USA, having the largest crypto trading market, the crypto exchanges are governed by a patchwork of regulations. In China, which accounted for 90% of total crypto trading up till 2017, there is a ban on some type of cryptocurrency trading. Nonetheless, some Chinese crypto exchanges are still operational as they have moved their base to Malta or Seychelles.
- The fee structure at crypto exchanges is designed to encourage large or regular trades. With the increase in the volume of trade, the fee often decreases. For traders that are infrequent and trade in small amounts, it is not a cost-efficient platform.
- Coin trade is promoted by exchanges. Usage of fiat currency is accompanied by deposit or withdrawal fees at exchanges. Trading with cryptocurrency on these platforms is mostly free. Only a small fee may be charged to set up a digital wallet for the cryptocurrency.
- Lastly, not all coins are offered for trade, even by most well-known crypto exchanges. But, users are permitted to transfer their online assets from one wallet to another and deposit their trading accounts using cryptocurrency or fiat currency.
Disclaimer: The article should not be considered as any financial advice. It is advisable to conduct thorough research before investing.
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